Update (August 18, 2:09 PM UTC): This article has been updated to include the views of both parties and additional information. Both sides are expected to make further comments.
Cryptocurrency influencer Evan Luthra has filed a lawsuit against cryptocurrency exchange Bitget for freezing his account following the listing of new tokens in March.According to Luthra, exchanges pause He withdrew and froze $200,000 in Tether (USDT), while attempts for clarification went unanswered.
Luthra’s involvement in the Reel Star project is the background to these events. The influencer was hired as an advisor to Reel Star, a startup developing a social media app for creators. As compensation, Luthra received Reel Tokens (REELT), the project’s utility token. After listing, the influencer sold 1.3 million RELT tokens on Bitget. Luthera’s account was subsequently frozen on suspicion of market manipulation. Regarding the decision, a spokesperson for Bitget told Cointelegraph:
“Bitget faced a manipulation attack by a group of traders trying to profit by manipulating trading on the exchange. Their target was a new coin called RELT, which they attempted to dump immediately after Bitget’s listing, leading to the Coin prices fell sharply.
Additionally, Bitget claims to have contacted the cryptocurrency influencer for an explanation: “In response, he admitted to selling tokens. However, when we asked about the reasons behind this unusual behavior, we did not receive positive feedback or a satisfactory answer.”
Luthra claimed his innocence, citing claims that Reel Star co-founder Navdeep Sharma allegedly approved of his token sale plans. The influencer is now seeking a hefty $16 million in damages, as well as $200,000 held in his account. His lawsuit involves Bitget, Foresight Ventures and key executives.
In the end, I just paid over $16,000,000 to Bitget for the damages and money they stole from me.
They blatantly disregard the laws and regulations and continue to carry out the scam.
But we won’t stop.
If you have funds in Bitget, get them out before they drop.
The reasons are as follows: pic.twitter.com/EHOiYREoMN
— EvanLuthra.eth (@EvanLuthra) August 4, 2023
“Bitget prevented me, a user of a fully KYCed (know your customer) platform, from withdrawing my tokens,” Luthra told Cointelegraph, adding:
“After I sold this portion of the allocated tokens, my funds – including the cryptocurrencies I already owned on the exchange prior to REELT (…) – were blocked, and the company stole my tokens themselves the value of.”
Gracy Chen, managing director of Bitget, said the exchange had previously Announce The case was investigated, and the findings were announced weeks later, with a compensation plan in place for more than 500 clients using the company’s own funds and frozen transaction funds.
“At Bitget, user protection is our top priority. When we discover any illegal or fraudulent behavior on our platform, we will take immediate action.” The firm has not yet received notice of the lawsuit.
Some recent news about a possible lawsuit against us by an advisor to the RELT project contains both fact and FUD. Regarding the “unusual trading behavior” of RELT tokens in April, we have already reported in our…
— Gracy Chen @Bitget (@GracyBitget) August 5, 2023
In response to Chen’s question, Luthra noted that he was just a “regular user who received tokens as compensation for consulting” and should not be considered part of the project team.
I’m a regular user, and I get tokens for consulting compensation, just like you get tokens for listing.
Holding me responsible for the price drop or treating me as part of the project is an unreasonable assumption. I’m not more involved with this project than you are…
— EvanLuthra.eth (@EvanLuthra) April 6, 2023
In a blog post, Bitget release Responding to the incident, it said it communicated with Lusla shortly after the incident. The exchange explained the reasoning behind its action: “After our investigation, we believe that the mentioned account is involved in suspicious trading behavior on Bitget.”
On X (formerly known as Twitter), members of the crypto community expressed mixed reactions to the lawsuit.Although some of Loutra’s supporters Observed The case exposed common problems faced by users of centralized cryptocurrency exchanges, but not others, explain Bitget acted correctly and protected users.
Best support for cex exchange #cryptocurrency Ecosystems are always more important than their services.
Likewise, even if you make the best product it doesn’t matter, if you don’t have a good enough service center then it’s worthless.
Without support, products and services are…
— Aman Sai (@amansaiofficial) August 4, 2023
Several prominent figures in the cryptocurrency community have weighed in on the matter, including Binance CEO Changpeng Zhao.
You should talk to them, right? We are not a regulator of other exchanges.
— CZ Binance (@cz_binance) April 6, 2023
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